Singapore's DBS Group, Southeast Asia's biggest bank by assets, said Friday it was cutting 900 staff to trim costs amid the global credit crisis, and reported a slump in third quarter net profit.

Chief executive Richard Stanley said most of the cuts, to be carried out at the end of the month, will come from its offices in Singapore and Hong Kong and will account for six percent of the workforce.

The job reductions were announced at a townhall-style meeting with staff on Friday.

"To be a streamlined organisation, I believe we must run a tighter ship... This is a painful decision for DBS and for me personally," Stanley told a news conference.

"We have been vigilant on costs but as the economy enters a more difficult and uncertain phase, many financial institutions around the world and in Asia have made headcount reductions," he added.

"To be more productive and efficient, we will restructure and streamline the organisation. Regrettably, this has resulted in the need to reduce our workforce by six percent or about 900 people, primarily in Singapore and Hong Kong, by the end of the month."

DBS stocks were down 18 cents or 1.6 percent to 10.92 in late afternoon trading Friday, with the main Straits Times Index higher by 0.54 percent.

Stanley, who was named to head DBS in February, said however that the cuts were not related to losses from its issuance of financial products linked to the collapsed US investment bank Lehman Brothers.

They also did not reflect the bank's financial position.

"DBS remains strong and sound," he said. "The tough measures we are taking now will enable us to confidently ride out this storm and emerge stronger when this global economic crisis is over."

Earlier Friday DBS said net profit in the three months to September fell 38 percent as market-related income took a hit from the global financial crisis and bigger provisions.

Third quarter net profit totalled 379 million Singapore dollars (256 million US), down from 610 million dollars in the same period last year, it said in a statement.

Analysts polled by Dow Jones Newswires had predicted an average 572 million dollars net profit.

"The operating environment is increasingly challenging for financial institutions the world over," Stanley said.

"We took upfront prudential levels of allowances to strengthen our balance sheet and with strong capital and liquidity, I believe we are well positioned to ride out the uncertainties ahead."

Net interest income in the September quarter grew two percent to 1.07 billion dollars from last year but net fee and commission revenues dropped 22 percent to 316 million dollars.

Other non-interest income plunged 87 percent on the year to 11 million dollars.

The bank said it set aside 129 million dollars in provisions, compared with just 10 million dollars a year ago, partly to cover its collateralised debt obligations (CDOs) portfolio.

CDOs are securities backed by a range of assets including bonds, loans and their derivatives, including corporate loans, high-grade mortgages, subprime mortgages, car loans and credit card debt.

It also set aside 70 million dollars as compensation to certain customers who bought its Lehman Brothers-linked product.

DBS was the last of three local banks to report earnings for the September quarter.

Oversea-Chinese Banking Corp said earlier this week third quarter net profit fell 13 percent while United Overseas Bank reported last week a 5.1 percent drop in profit for the same period.